EICI Wants Government of India to Encourage Express Industry

EICI Wants Government of India to Encourage Express Industry

The Government of India brought in a policy early this year, to elevate the GDP on par with the international standards. Express Industry Council of India (EICI), international & domestic express company, sates the government has overlooked express industry, especially air cargo segment, in the draft national logistic policy. It further states that air cargo delivery needs special focus to reduce logistics costs in the country.

“We laud the efforts in preparing the draft policy covering a broad spectrum of focus areas to drive the growth of Indian logistics sector. However, we note that the policy document does not focus on express industry and air cargo sectors, which are integral parts of the logistics network. The air express has also been overlooked in the multi modal mix even though air is an essential segment of the movement of goods,” EICI says. 

It further adds, “In developing countries like India, an efficient air express infrastructure contribute directly to global competitiveness of the country by ensuring just in time deliveries and reduced clearance dwell time. Further, efficient express delivery industry acts as an economic catalyst by opening up new market opportunities, moving products and services with speed and efficiency”.

The government had issued the draft national logistic policy, to bring down the logistics costs from 13–14 percent of GDP to 10 percent in line with global standards. The policy further attempts to optimize the current multi-modal mix, where road has a share of 60 percent, railways account of 31 percent and waterways nine percent. This is an attempt to bring the sector on par with the international benchmarks.

Aviation Turbine Fuel (ATF) holds the huge part of 40 percent share of direct operating cost. Excise duty and VAT for state and central governments, respectively, on AFT add another 30-35 percent cost.

 

“Such exorbitant costs severely affect the sustainability of express air cargo operations and excludes access into this reliable and speedy form of air transportation of items like perishables that would benefit both the producer and customer across the country and globally,” EICI states.

“The government should permit express cargo airlines to avail input credit of excise duty as was done before GST regime. ATF should be brought under GST and input credit on GST paid on ATF should be made available to express cargo airlines,” EICI adds.

EICI also suggests measures to streamline E-Way Bill system. “The onus of the EWB should shift from the transporter to the shipper as they have complete control on the content of the shipment. This will ensure that the right EWB is being generated and also impact the transit time positively as time bound delivery is a critical aspect in the express business industry.”

“We also urge the government to introduce single window clearance for courier clearances to reduce EXIM dwell time. Skill development plans and training programs are required for the training of new roles such as last mile delivery associates, operations processing staff that work mainly with Express and Third party logistics (3PL) players, the government should focus on this aspect as well.” EICI adds.

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